Donating Commercial Office Space

Donating commercial office space to nonprofits and charities can offer Americans an opportunity to receive large tax reductions while making a difference in their community.  The majority of the time, donations of commercial space to groups like universities and arts groups gives them an opportunity to offload bad investments.  The donor can bequeath property for a museum or other spaces, or can allow for the place to be sold for cash.

What Is an Example of Donating Property for Personal Profit?

Not many people know that the real estate mogul Donald Trump comes from a family of businessmen – and his father Frederick C. Trump is known for a space donation he made in the 1990s.  He donated about $33 million worth of property to the National Kidney Foundation.  These buildings generated over $600,000 in income annually for the National Kidney Foundation.

This generous donation was not just beneficial for the foundation, however: the Trump family made it possible to reduce the amount of estate taxes that his family would have to pay after his death, and also allowed them to claim a tax deduction as well.

How Do You Donate Commercial Office Space?

There are several steps you should take if you are considering donating commercial office space:

  • Determine whether you are certain to donate your commercial office space, and whether the benefits outweigh the losses for you or your company. 
  • Then, research to find a cause or foundation you want to support through your donation. 
  • They will either sell the property for money to support themselves, rent out the property to generate income, or set up shop in this new property and not have to purchase this property themselves.

What Are the Benefits of Donating Commercial Office Space?

By getting rid of bad investments, you can really improve your real estate profile.  If you are a company with too much commercial office space or if you own commercial real estate and want to sell it,  you could lower your taxes and perhaps profit.  However, if you are trying to get rid of bad investments by trying to sell them,  you’ll often lose money since in the process.

By donating your office space that lacks a positive cash flow or assets that are unusable to you, you can actually win in this situation.  It can lead to a hefty tax reduction and could also lower your company costs.    The size of the tax deduction is determined by the market value of the property today, not what you paid when you first purchased the property.

Getting Help

If you are interested in learning more about the process of donating commercial office space or if you are considering making such a donation, you should contact an experienced real estate attorney. Your attorney can help you through the process of donating commercial office space and can help ensure that you make the most advantageous decision and receive all the legal benefits of such a donation.

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